Why Good News For Coal Is Bad News For GE

Jul 17, 2013 1:50 pm ET

By Kate Linebaugh

A tidbit of good news for rail operator CSX bodes poorly for General Electric.

CSX said its domestic coal shipments rose in the second quarter from a year earlier for the first time since at least 2010. That uptick, which the company cautioned came off a very low base last year, was a result of a rise in prices for natural gas, which has utilities using more coal to generate power.

CSX said domestic shipments of coal to utilities increased 9%. CSX executive Clarence Gooden said on a conference call that the outlook for the rest of the year isn’t as rosy thanks to high stockpiles at many utilities, with domestic coal volumes expected to fall 5% to 10% for the third quarter and the full year.

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